Yahoo Finance CNP or MGEE: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Utility - Electric Power sector have probably already heard of CenterPoint Energy (CNP) and MGE (MGEE). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
CenterPoint Energy and MGE are both sporting a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
CNP currently has a forward P/E ratio of 18.71, while MGEE has a forward P/E of 20.20. We also note that CNP has a PEG ratio of 3.12. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MGEE currently has a PEG ratio of 4.79.
Another notable valuation metric for CNP is its P/B ratio of 1.90. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, MGEE has a P/B of 2.36.
These are just a few of the metrics contributing to CNP's Value grade of B and MGEE's Value grade of D.
Both CNP and MGEE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CNP is the superior value option right now.
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CenterPoint Energy, Inc. (CNP) : Free Stock Analysis Report
MGE Energy Inc. (MGEE) : Free Stock Analysis Report
